It's Easy To Fall Into The Trap

OUR VIEWS - Fleeced in Florida

May 4, 2000|By Fuchsia

The Winter Park single mother of four knew that she was at a financial dead end. It was the day she usually buys groceries for her family, and she had no money.

Not about to let her children go hungry and reluctant to ask for help, she turned instead to a payday-advance business. She wrote a postdated check for $335, covering a $300 loan plus interest and fees, and promised to make good on the check in two weeks. She couldn't.

The lender, eager to keep making money from the woman, agreed to let her pay only the interest and fees of $35. And so it continued, every two weeks, for months. After half a year, the reality of the woman's unending commitment really hit home. Already she had paid $420 and still owed the original $300 debt. Unlike many, who seek additional paycheck loans to stay afloat, she was determined to save herself. Although she already was budgeting every penny, she began to deprive herself of all but necessities.

Altogether, after more than a year, she was able a few months ago to collect the $300 and pay off the loan. The payday advance had cost her nearly $1,000.

As the woman counted her losses, she also had to put up with her mother's angry reproach. The woman's mother, it turns out, gladly would have helped pay for food for her grandchildren.